Fact Sheet on the Undai River Diversion

Oyu Tolgoi Gold and Copper Mine, Mongolia

2 April 2013

Background

The Undai River supplies the water for the herding community affected by the OT mine. Without this source of water, two major and irreversible shifts will occur:

1)The vegetation that has grown up around the River, including the rare leafy trees and shrubs in the area, and numerous plants, will not be able to survive. The vegetation provides shade, nesting areas, shelter, and food resources for livestock and wild animals. It also stabilizes the soil and reduces wind erosion and dust. OT LLC has no intention of mitigating for these impacts. As an example, the 2012 Detailed Environmental Impact Assessment states under Section 2.6.4.1 Mitigation measures to endangered plant species:

"It was impossible to transplant Elm trees which is growing in area under mining influence along the Undai river because matured plants are not proper for transplanting (pp. 94-95, Undai River DEIA)."

So those old and highly valued trees (see below) will simply be lost, with no compensation to the herding community.

2)The herders will have nowhere to water their livestock, especially in the winter months, if the majority of the water resources in the region are frozen or dried up.

Therefore, diverting the River is not merely a technical or hydrological issue. It affects the entire ecosystem - human, animal, plant, soil - and the cultural landscape.

In 2011, the US AID led a fact-finding trip to the area, and reported the following details about the River and water sources in the area:

"The Undai River is the sole surface water source for this area, although it does not flow year round. The Undai River flows through OT property and will need to be diverted. The issue of concern is that most of the Undai River flow volume is subterranean and surfaces when it is dammed by a dike. One of the springs along the Undai that happens to exist within the boundaries of the mine site is named Bor Ovoo. Several stakeholders believe that an unanswered question is once the water is diverted from flowing from above the mine site and returned to the channel below the mine site, whether the water remaining on the surface will evaporate and therefore not be able to recharge any of the springs/wells downstream (p. 13)."[1]

“Herder Concerns

  • Negative impacts on ground water either through contamination or draw down by project activities. Although OT has stated that they will create new water sources, some herders do not believe that these new ones will work as well as the original ones. Herders have been experiencing a lowering of the water table over time which seems to be getting worse. It is becoming more and more difficult to find adequate water resources for livestock…In one case there is a water source (Hajuu Hurur) that is used regularly by livestock, however, OT will be fencing it within their property so it will not be available for livestock…The nexus between adequate pasture and access to water is critical for survival of livestock. It was suggested that new water sources need to be established in areas that can support summer pastures. The herders carry most of the risk and OT does not understand the dynamics of herding and the need to follow the livestock to adequate pasture and water sources.
  • For herders that remain to be relocated or desire better relocation areas, it is difficult to decide where to move due to increased development and changes in the environment due to desertification. It is economically and psychologically difficult for herder families to move from their traditional land.
  • Lack of respect for herders cultural and spiritual sites. Specific examples were in relationship to OT removing what is considered sacred trees from the Undai riverbank that had been in existence for 150-200 years (p. 20).”[2]

Update Winter 2013

These concerns from the USAID trip were identified well in advance of the diversion project’s commencement. Yet they still have not been addressed. And now the situation is considerably worse, because according to OT Watch after a recent groundtruthing trip to the field and Southwest Research and Information Center’s satellite images, the diversion is well under way, without regard for the herders, the environment, or international policy. It may even be that a second river is being diverted (the main tributary of the Undai), a fact which was certainly not part of the EIA materials for the OT mine.

What is Needed Now

The foremost request from the herders is to halt the diversion of the Undai River and its tributaries until meetings can be arranged between OT LLC and the families in order to negotiate an agreement about moving forward. From a scientific perspective, it is also clear that the detailed models and accurate estimates of diversion-induced water loss and water used by the mine, in the December 2011 SMEC Undai Diversion Engineering Report (A2MW-2510-10-OT004 SMEC Detailed Engineering Package, December 2011) cited in the 2012 Undai Diversion DEIA for the Undai Diversion that was just recently provided to herders and their representatives and not posted by OT needs to be reviewed and assessed by the herders whose lives the Diversion will change irreparably before this massive project should be allowed to proceed.

Appendix: COALITION RESPONSE TO THE IFC (Section on the Undai River)

3.2The Undai River Diversion

We appreciate that OT LLC has now made the Detailed Environmental Impact Assessment (“DEIA”) for the Undai River diversion publicly available.[3] We are concerned, however, that the DEIA does not adequately address key concerns regarding the diversion project, in particular, the loss of the Bor Ovoo spring. The Company should stop all work on the Undai River diversion, which has moved forward without appropriate consultation with herders.

The Undai River diversion is seriously problematic for the herders and wildlife that depend on the Undai River’s particular location, temperature, water quality and flow rate. The same can be said for the “relocation” of the Bor Ovoo spring. Both of these water features have been part of the landscape for many generations of herders and other species alike, and the flora and fauna surveys conducted by OT LLC show clear evidence of high usage.

OT LLC states that the impacts of the water diversion and spring relocation will be definite for the water resources, the flora & the wildlife. See Tables below from the Oyu Tolgoi LLC Undai River Protection and Partial Diversion Project Detailed Environmental Impact Assessment (2012) (“Undai DEIA”).[4]

Each of these risks is serious, yet the mitigation offered is minimal:

These mitigation measures are in no way sufficiently detailed for anyone actually charged with the task of carrying out the diversion and spring relocation to do it properly. The IFC Response is extremely misleading to the extent that it claims that these measures are evidence of detailed, technical responses to this highly sophisticated (many scientists would say impossible) hydrological feat. For example, what does “rehabilitate the riversides” mean? With vegetation? With machinery? Also, how should the employees on the ground ensure that upstream sediments are not destroyed? What does it mean to “destroy sediment”?

In summary, although the Undai DEIA is exclusively for the water projects, it fails to offer adequate detail about how the projects will be carried out without severe and permanent damage to the water resources and the flora and wildlife dependent upon those water resources. Thus, while we are pleased that the IFC Response includes a commitment to track the performance of the Undai diversion and the relocation of the Bor Ovoo, such a response is insufficient to prevent severe and permanent damage. We therefore continue to believe that the Company should respect the rights of the local herders to protect a vital source of water by stopping the diversion project.[5]

1

[1]

[2] Ibid.

[3] We would like to note that the tailings dam sits on the most important tributary of the Undai River, which should also have been diverted according to EBRD staff during our January 2013 meeting. We would like to see the report of that diversion and a cumulative impact assessment.

[4]Available at:

[5] We note again, as explained above, that the diversion project is the subject of a second CAO complaint, filed in February 2013. Moreover, we note that the Undai River diversion is argued as necessary because a section of it occupies space planned to be occupied by waste rock storage and affected by open-pit mining. We note that ESIA, Chapter A4 states an indicated open-pit phase plan [figs 4.7 & 4.8 pp 17-18/77] and it states 127 Mt proven resources and 828 Mt probable resources of copper [4.3 tab 4.1 citing IDP 2010 tab 2.1.2]. We also note that IDOP 2012 [tab 1.2, p36/513] gives 102Mt measured, 465 Mt indicated and 88Mt inferred resources of copper. We believe, therefore, that it is reasonable to conclude that less total volume of ore/rock will be excavated. We therefore want to know how this will affect both the area taken by open-pit mining and the area that is subject to impact from it. When this is considered with our strong assertion that dry tailings treatment would decrease land-take, we believe that it may not be necessary to divert the Undai River. We question why this was not evaluated in the ESIA and the Undai DEIA.